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Oil prices held largely steady in Asian trade on Monday, consolidating sharp gains from last week. Market sentiment was supported by fading expectations of an imminent Russia-Ukraine ceasefire and dovish signals from the U.S. Federal Reserve pointing to a possible rate cut in September. As of 21:20 ET (01:20 GMT), Brent Oil Futures for October delivery inched up 0.1% to $67.77 per barrel, while West Texas Intermediate (WTI) crude rose 0.1% to $63.72. Both benchmarks posted nearly 3% gains last week.
Geopolitical Developments Remain in Focus
President Donald Trump last week proposed a trilateral summit with Russia and Ukraine to explore peace negotiations. Ukrainian President Volodymyr Zelenskiy welcomed the move, though doubts remain over Russia’s willingness to resolve the conflict. Markets remain cautious that any ceasefire agreement could pave the way for easing U.S. sanctions on Russian oil, potentially adding to global supply. For now, optimism over a quick breakthrough has faded, lending support to prices.
U.S.-India Trade Tensions Add Uncertainty
Washington is set to impose an additional 25% penalty tariff on Indian goods starting August 27, doubling the rate to 50%. The move comes in response to India’s continued purchases of Russian oil. Despite the pressure, Indian refiners signaled they will maintain imports of Russian crude, suggesting resilient demand that could help underpin global prices.
Fed Rate Cut Expectations Support Demand Outlook
Federal Reserve Chair Jerome Powell’s comments at the Jackson Hole symposium last week reinforced expectations of monetary easing. Powell pointed to risks in the labor market, prompting markets to price in an 87% probability of a 25-basis-point cut in September. Lower borrowing costs would typically encourage investment and consumption, supporting energy demand and providing an additional tailwind for crude.
